Term Insurance Facts

YOU CAN BUY A HUGE AMOUNT OF TERM LIFE INSURANCE
FOR ONLY A FEW DOLLARS A MONTH!

I’m sure you’ve seen the adds, their everywhere...and it’s true. In fact, I can get you really low rates on term life insurance. Companies are practically begging me to sell it for them and offering obscene commissions if I would. There is only one small problem...my conscience.
You see, over the years that I’ve worked in the insurance business I’ve learned a lot of important things about life insurance and witnessed the outcome of people who bought term. And I’d like to share some of this with you.
Many people ask me what is the difference between term and whole life (cash value) life insurance?
Just take a moment to think about those two words. TERM is a certain period of time, or temporary. While WHOLE LIFE is an entire lifetime, or permanent.
Term is like renting a house where you pay rent year to year (which usually increases over time), and when you move all you have to show for all that rent is a box of receipts. Where whole life is like buying a home. You own a policy with guaranteed values, a set premium which never increases, and you build equity (cash value) over the years.
That’s it, term only insures you for a defined period of time then expires worthless, while whole life protects you as long as you need it then pays off.
Now, there are certain conditions where term is the insurance of choice. These are usually young families just starting out with a high debt, low income, and small children who need a lot of coverage for a few years until hopefully, their debt is lower and their income higher. Also people who incur a large temporary debt which needs to be covered until that debt can be paid off. Such as those starting or expanding a business. These are the type of temporary circumstances that term was designed for. Term was never intended to replace permanent insurance.
It is also interesting to note that these groups are also people more likely to rent living or business quarters. As families and businesses mature and prosper, they naturally tend to own rather than rent.
After all, if you were planning to stay in one place for several years, would it make more sense for you to rent a house or buy a home?
How then could it make sense for anyone in good health with every expectation of living a normal life span, to rent insurance which would only pay off if they died prematurely, when they could own a policy which could provide many financial benefits?

Well...actually, I can think of two reasons.
There are two groups with special incentives to promote term life insurance.
1. Those “advisers” who have something else to sell. Let me explain. Before 1980 term life insurance wasn’t so well known. Companies and agents exercised greater diligence and only recommended term when it actually fit the circumstances. Then in the early 80’s a new company was formed by a man (with no experience in insurance) with the slogan “Buy term and invest the difference”. They recruited hundreds of untrained, temporary agents who sold thousands of policies and talked many people into cashing out good older policies in order to put that money into their mutual funds which they also sold.
The results were, most people (I estimate about 80%) ended up without anything...no insurance and no savings. Lawsuits were filed, legislation was passed (there are no more temporary agents in KY), and the company changed its name (but their still around). In fact, just last year I met a man (also no experience in insurance) who made MILLIONS of dollars with that company and I talked with some of the people who work with him. They admitted that only about 12% of the people who bought their term insurance were successful in investing the difference. However, even with over two decades of such pitiful results, the “buy term and invest” theory is still perpetuated by those with something else to sell.
2. The second group is the companies and agents who only sell term insurance and don’t have anything better to offer. Their motive is very basic. Term insurance is almost 100% profit for the companies who sell it and their agents make huge commissions. In contrast, term insurance is usually a 100% loss for the consumers.

It is an industry fact that over 97% of all term policies expire worthless. The people who buy them not only lose all of the money they paid in, but their loved ones lose all of the death benefit, compounding their loss. When you factor in the fact that about 88% were not successful in investing the difference, that leaves approximately 80% off all term buyers worse off then if they had never bought term insurance at all!
It all comes down to one thing. If someone is trying to sell you term life insurance, its probably because they make money from it, not necessarily because its the best thing for your family.

Now, if your still set on buying tern insurance, give me a call. Like I said, I can get you really low rates on term, my conscience is clear now, and I don’t mind making a lot of money. Just don’t get mad at me in a few years when it falls apart and you find yourself without any insurance and no way to get any.
Or...I could show you something much better.
And no, I am not referring to the old whole life (final expense) policies like the kind your parents had. The ones they had to pay on their entire lives and never got any benefit from except a death benefit which took the low interest earning cash value with it.
Most people don’t realize this but, In the 21st Century, there are investment grade policies which have the low insurance rates of term, yet can earn double digit (tax-deferred) interest on any money put on the savings side. And this money can be withdrawn (usually tax-free) for any reason. These policies can be structured so that when you reach retirement age, your payments can stop and you can start receiving tax-free income that will not affect you social security of any other income.
These policies can also pay living benefits for things like severe illness and nursing home care. In short, this is insurance you don’t have to die to use. Oh yeah, they also pay a big tax-free death benefit to your family. But do not expect anyone else to tell you about these policies. There are very few agents qualified and willing to take the time to learn about them. Its much easier to just sell term. Also, there are only a few policies that qualify as investment grade, and these usually need to be adjusted before their issued so that they will have the maximum gain on the investment.

So now I have a question for you...Do you really want to rent temporary insurance, or would you like to look into owning an investment grade product with living and retirement benefits, and insurance thrown in?
Either way, Kentuckians should contact me today. I have ridiculously low term rates and most other agents don't even know about investment-grade policies, much less understand them.

Visit my web site Financial Team

And please smile...
you’re about to find out how to save a lot of money!

robertwrightassociates@gmail.com

Affordable Health Care

Finding Affordable Health Care isn’t easy these days. Traditional health insurance plans with low co-pays and deductibles have become too expensive for many Americans. Many people work so they can be covered under an employer’s group insurance policy, but what about those who are self-employed? Fortunately, there are more affordable alternatives. In this report I will discuss some health care strategies.

Are group insurance plans the answer? The main advantages to a group plan are, usually someone else is paying for part of it, and people with pre-existing medical conditions can get coverage. Most people assume that group rates are cheaper than individual rates, and sometimes the are. But often that is just because the employer is paying part of the premium as an employee benefit. The fact is, group rates are based on the collective health of the entire group, so if a few employees have high medical expenses, the other employees are charged more to make up the difference. Many times a healthy person can find better rates than going through an employer.
There are two disadvantages to employer’s group policies. First you have limited choices from whatever plans are offered. And second, when the job goes, your insurance goes. Then if you have a medical condition, you could find it very difficult and expensive to get replacement coverage, even with COBRA benefits. By getting your own policy now, you get to choose the best plan for your needs and you won’t lose it if you change jobs. If your employer does offer group insurance and you want your own plan, ask if they will contribute to your policy instead.

Americans are used to health insurance with low-deductibles and low co-pays. The easiest way to lower the cost of health insurance is to take a higher deductible and co-pay. Premiums drop dramatically as deductibles rise. But many people find it difficult to pay the higher deductibles. A great strategy would be to pay less to the insurance company and put the difference into a savings account. Your monthly out of pocket expense may be the same, but look at it this way. If you pay all your money to an insurance company and never use your insurance, the insurance company just keeps your money. But if you put some of that money into a savings account and don’t use it, you get to keep your money plus interest.

That’s pretty much how a Health Savings Account or HSA works, only better. With a HSA, you have a high deductible major medical plan with premiums about 45%-55% lower than a traditional health insurance policy. You can then put the money you’ve saved into a qualified Health Savings Account. Contributions to your Health Savings Account are tax-deductible. Than means that if you are in a 33% tax bracket, Uncle Sam will contribute one dollar for every two dollars you contribute. Pretty good deal huh? But wait, it gets even better.
The money in your Health Savings Account earns interest, beginning with the first dollar deposited, and your account will grow tax-deferred. Then you can withdraw money tax-free to help pay your deductible or other qualified health care expenses like prescriptions, vision or dental care.
Now, either you will need your health coverage or you won’t. If you do have medical expenses larger then your deductible, your insurance will take over paying your bills. The company I represent pays 100% of all covered expenses up to $3 million dollars. And if you don’t have many medical expenses, the money in your Health Savings Account will still be your money. Any money you don’t use will accumulate year after year.
A Health Savings Account can give you back control over your health care instead of an insurance company making all the decisions. You will still get the better rates for services negotiated by the insurance company with the doctors, hospitals and drug companies. But many Doctors will work with patients when they know you have a Health Savings Account. Your Doctor may give you a greater discount knowing that he will be paid now rather than waiting for an insurance company to pay. He may also offer you the choice of a less expensive treatment or prescription since your the one making the decisions.

For more information, or an on line quote, Kentucky residents may visit my web site Financial Team.

Note: The author is a licensed insurance professional in the Commonwealth of Kentucky. Insurance rules are State specific, therefore the opinions and advice offered here pertains specifically to residents of Kentucky. Although persons in other areas may find this information useful, no warranty is made and anyone should consult with a licensed agent in their home State before implementation of any of the ideas offered here.